SOURCE: Global Healthcare REIT

Global Healthcare REIT

August 14, 2015 15:40 ET

Global Healthcare REIT Reports Second Quarter 2015 Results

Q2 Rental Revenue Up 273% to $1.2 Million

ATLANTA, GA--(Marketwired - Aug 14, 2015) -  Global Healthcare REIT, Inc. (OTCQB: GBCS), a company that owns healthcare properties and leases them to senior care facility operators, reported results for the second quarter ended June 30, 2015.

Q2 2015 Highlights

  • Rental revenue increased 273% to $1.2 million versus the same year-ago quarter
  • Net loss to common stockholders improved to $0.1 million from a net loss to common stockholders of $0.2 in the same year-ago quarter.
  • Paid quarterly cash dividend of $0.01 in Q2, marking the company's fourth quarterly dividend.

Q2 2015 Financial Summary
Rental revenue increased 273% to $1.2 million in the second quarter of 2015, as compared to $0.3 million in the same year-ago quarter. The increase in revenue was due to the contribution of facilities acquired in 2014, with the number of facilities totaling 11 as of June 30, 2015 versus six at June 30, 2014.

Rental revenue in the second quarter of 2015 was derived from 10 out of 11 facilities in the company's portfolio, with the Southern Hills independent living facility currently undergoing renovations that are scheduled for completion by the end of the year.

Total expenses were $0.6 million in the second quarter of 2015, compared to $0.4 million in the same year-ago quarter. The increase in total expenses was due to increased depreciation expense due to the addition of properties to the company's portfolio in 2014, and related increased general and administrative expenses. As the company continues its acquisition campaign for healthcare real estate, it anticipates revenue and cash flow to increase while holding general and administrative costs relatively flat at approximately $205,000 per quarter, excluding costs related to the Tulsa independent living facility until the renovation is complete and an operator is in place.

Interest expense was $0.7 million in the second quarter of 2015, as compared to $0.1 million in the same year-ago quarter. The increase in interest expense is due to increased debt associated with new acquisitions. 

Net loss to common stockholders was $0.1 million or $(0.01) per basic and diluted share in the second quarter of 2015, as compared to net loss of $0.2 million or $(0.01) per diluted share in the same year-ago period. The improvement in net loss to common stockholders in the quarter was primarily due to increased revenues.

Cash and cash equivalents totaled $1.0 million as of June 30, 2015, as compared to $0.5 million as of December 31, 2014.

Funds from operations (FFO) was $282,000 or $0.01 per share in the second quarter of 2015 (see "Use of Non-GAAP Financial Information," below for the definition of FFO, a non-GAAP financial metric, as well as an important discussion about the use of this metric). The company's dividend percentage of FFO was 78.70% in the second quarter of 2015. Given that the company first began to track and report FFO in the first quarter of 2015, there is no comparative year-ago period for FFO.

Subsequent to the end of the second quarter of 2015, Global signed a definitive purchase agreement to acquire a 112-bed skilled nursing facility in Ridgeway, South Carolina for $3.0 million. The company expects to complete the transaction in the current quarter and finance the acquisition with a traditional bank loan.

Management Commentary
"The six acquisitions of skilled nursing facilities since the year-ago quarter helped drive strong quarter-over-quarter growth in rental revenue," said Global Healthcare REIT's president and CEO, Christopher Brogdon. "Our acquisition campaign for healthcare real estate is currently focused on closing our recently announced agreement to acquire a skilled nursing facility in South Carolina, which would represent our first facility in the state. As we grow our portfolio of senior care facilities, we anticipate revenue and cash flow to increase as we maintain corporate overhead relatively flat."

Quarterly Dividend
The company paid a regular quarterly cash dividend in July in the amount of $0.01 per common share for the second quarter of 2015.

"We recently paid our fourth quarterly dividend and expect our dividend to grow over time with the growth in our healthcare facilities portfolio," commented Brogdon. "If we can execute on our acquisition campaign and debt refinancing plans, we could double the dividend in the first quarter of 2016."

Conference Call
Global Healthcare REIT will host a conference call next week to discuss the second quarter of 2015, followed by a question and answer period.

Date: Monday, August 17, 2015
Time: 10:00 a.m. Eastern time (7:00 a.m. Pacific time)
Dial-In number: 1-888-452-4004
International: 1-719-325-2497
Conference ID: 3268825
Webcast: http://public.viavid.com/index.php?id=115730

Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.

A replay of the call will be available after 1:00 p.m. Eastern time on the same day through August 24, 2015.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 3268825

Summary of Property Portfolio
ALF = Assisted Living Facility SNF = Skilled Nursing Facility ILF= Independent Living Facility

                 
Property Name   Property Count Facility Type Beds/Units   Gross Annual Rent Location Date Acquired
Middle Georgia   1 SNF 100 beds   $570,000 Eastman, GA 3-15-2013
Warrenton   1 SNF 110 beds   $334,448 Warrenton, GA 12-31-2013
Southern Hills   1 SNF 106 beds   $420,000 Tulsa, OK 2-7-2014
ILF 86 units   Under renovations
ALF 32 beds   $240,000
Goodwill   1 SNF 172 beds   $734,400 Macon, GA 5-19-2014
Edwards Redeemer   1 SNF 106 beds   $540,000 Oklahoma City, OK 9-16-2014
Golden Years Manor   1 SNF 141 beds   $763,000 Lonoke, AK 9-16-2014
Sparta   1 SNF 71 beds   $237,372 Sparta, GA 9-16-2014
Greene Point   1 SNF 71 beds   $254,220 Union Point, GA 9-16-2014
Meadowview   1 SNF 80 beds   $361,000 Seville, OH 9-30-2014
Total   9 11 1,075   $4.5 Million    
                 

About Global Healthcare REIT

Global Healthcare REIT acquires real estate properties primarily engaged in the healthcare industry, including skilled nursing homes, medical offices, hospitals and emergency care facilities. The company does not operate its own healthcare facilities, but leases its properties under long term operating leases. It currently owns interest in 11 facilities primarily across the Southeastern U.S. For further information, visit www.gbcsreit.com.

Forward-looking Statements

This press release may contain projection and other forward-looking statements. Any such statement reflects the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur and actual results could differ materially from those presented. There can be no assurance that the Company will be able to declare and pay cash dividends to common stockholders in the future, or the frequency or amount of such dividends, if any. A discussion of important factors that could cause actual results to differ from those presented is included in the Company's periodic reports filed with the Securities and Exchange Commission (at http://www.sec.gov).

Note Regarding Non-GAAP Financial Measures
Beginning with the reporting of results for the first quarter of 2015, the company began to report the measures of funds from operations (FFO) and FFO per share.

Funds from Operations (FFO), as defined by the National Association of Real Estate Investment Trusts (NAREIT), and FFO per share are important non-GAAP supplemental measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation except on land, such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that uses historical cost accounting for depreciation could be less informative. Thus, NAREIT created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP.

FFO is defined by NAREIT as net income computed in accordance with GAAP, excluding gains or losses from real estate dispositions, real estate depreciation and amortization and impairment charges, and adjustments for unconsolidated partnerships and joint ventures. The Company computes FFO in accordance with NAREIT's definition.

   
   
GLOBAL HEALTHCARE REIT, INC.  
CONSOLIDATED STATEMENTS OF OPERATIONS  
(Unaudited)  
   
  Three Months Ended
June 30,
    Six Months Ended
June 30,
 
  2015     2014     2015     2014  
Revenue                              
  Rental Revenue $ 1,162,359     $ 311,753     $ 2,285,673     $ 545,032  
Expenses                              
  General and Administrative   316,102       274,336       760,468       392,598  
  Acquisition Costs   -       -       -       180,455  
  Loss on Sale of Property and Equipment   -       -       -       381,395  
  Depreciation   306,014       97,423       610,725       168,504  
    Total Expenses   622,116       371,759       1,371,193       1,122,952  
Income (Loss) from Operations   540,243       (60,006 )     914,480       (577,920 )
Other (Income) Expense                              
  Bargain Purchase Gain   -       -       -       (3,000,000 )
  Interest Income   (24,092 )     (22,063 )     (63,164 )     (51,330 )
  Interest Expense   654,697       148,094       1,339,011       367,776  
    Total Other (Income) Expense   630,605       126,031       1,275,847       (2,683,554 )
Equity in Income (Loss) from Unconsolidated Partnership   -       (15,425 )     53,688       (15,425 )
Net Income (Loss)   (90,362 )     (201,462 )     (307,679 )     2,090,209  
    Net Income Attributable to Noncontrolling Interests   (24,151 )     (16,019 )     (39,137 )     (10,117 )
Net Income (Loss) Attributable to Global Healthcare REIT, Inc.   (114,513 )     (217,481 )     (346,816 )     2,080,092  
    Series D Preferred Dividends   (7,377 )     (7,500 )     (14,877 )     (23,281 )
Net Income (Loss) Attributable to Common Stockholders $ (121,890 )   $ (224,981 )   $ (361,693 )   $ 2,056,811  
Per Share Data:                              
Net Income (Loss) per Share Attributable to Common Stockholders -                              
  Basic $ (0.01 )   $ (0.01 )   $ (0.02 )   $ 0.11  
  Diluted $ (0.01 )   $ (0.01 )   $ (0.02 )   $ 0.10  
Weighted Average Common Shares Outstanding:                              
  Basic   22,018,906       19,720,478       21,961,607       18,437,408  
  Diluted   22,018,906       19,720,478       21,961,607       21,139,345  
                               
                               
                               
GLOBAL HEALTHCARE REIT, INC.  
CONSOLIDATED BALANCE SHEETS  
(Unaudited)  
   
    June 30, 2015     December 31, 2014  
ASSETS  
                 
Property and Equipment, Net   $ 39,970,460     $ 40,259,357  
Cash and Cash Equivalents     968,179       533,597  
Advances to Related Parties, Net of Allowance     433,211       353,211  
Restricted Cash     524,561       904,157  
Note Receivable     250,000       -  
Notes Receivable - Related Parties, Net of Discount     685,216       1,186,822  
Prepaid Expenses, Deferred Loan Costs, and Other     1,212,053       1,490,634  
Goodwill     1,750,454       1,750,454  
                 
Total Assets   $ 45,794,134     $ 46,478,232  
                 
LIABILITIES AND EQUITY  
Liabilities                
  Debt, Net   $ 37,310,837     $ 37,610,874  
  Accounts Payable and Accrued Liabilities     241,665       268,942  
  Dividends Payable     219,158       -  
  Lease Security Deposit     256,667       176,667  
                 
Total Liabilities     38,028,327       38,056,483  
Commitments and Contingencies                
Equity                
  Stockholders' Equity                
    Preferred Stock:                
      Series A - No Dividends, $2.00 Stated Value, Non-Voting; 2,000,000 Shares Authorized, 200,500 Shares Issued and Outstanding     401,000       401,000  
                       
      Series D - 8% Cumulative, Convertible, $1.00 Stated Value, Non-Voting; 1,000,000 Shares Authorized, 375,000 Shares Issued and Outstanding                
  375,000       375,000  
                       
      Common Stock - $0.05 Par Value; 50,000,000 Shares Authorized, 22,237,352 and 21,640,051 Shares Issued and Outstanding at June 30, 2015 and December 31, 2014, Respectively     1,111,867       1,082,003  
      Additional Paid-In Capital     8,620,682       8,540,520  
      Retained Earnings (Accumulated Deficit)     (586,645 )     212,573  
      Total Global Healthcare REIT, Inc. Stockholders' Equity     9,921,904       10,611,096  
                       
      Non-controlling Interests     (2,156,097 )     (2,189,347 )
                 
  Total Equity     7,765,807       8,421,749  
                 
  Total Liabilities and Equity   $ 45,794,134     $ 46,478,232  

Contact Information

  • Investor Relations Contact:
    Ron Both
    Liolios Group, Inc.
    Tel 949-574-3860
    Email Contact